The agreement was signed in Sisak on Monday by Finance Minister Ivan Suker and the World Bank's director for Croatia, Bulgaria and Romania, Anand K. Seth.
The EUR60 million project will be implemented in 13 counties and financed with the EUR35 million loan and EUR25 million from the national budget. The money will be invested in the development of local communities, mine clearing, the development of social institutions and project management costs. The loan has been approved for a 15-year period, with five years' grace.
With the project, the World Bank is supporting the Croatian government in its efforts to economically revive previously war-struck areas and integrate the local population into the society, which is part of the government's European Union integration programme, it was said at the signing ceremony.
Minister Suker said investing in local communities and mine clearing was vital for Croatia because it enabled development, which he added was a condition for people to stay living in previously war-struck areas.
Suker also said the government had set aside US$18 million for Sisak's ironworks, which he added had helped relaunch production.
Responding to questions from the press, Development Minister Bozidar Kalmeta said works on the Zagreb-Sisak highway would begin this autumn.
Director Seth said the highway project would provide many people with jobs, thus reducing the high unemployment in formerly war-struck areas.